Texas vs. California myth-busting

Chuck DeVore, a Republican who represented Orange County in the California Assembly from 2004 to 2010 and now lives in Texas, couldn’t resist jumping into the most recent Texas versus California debate. Here’s a response he wrote to a column by Chronicle political writer Joe Garofoli.

There’s been a lot of back-and-forth ink spilled and electrons harnessed regarding the two largest states where 1 in 5 Americans live. The most recent was prompted by some California radio ads purchased by the State of Texas to encourage California businesses to move to the Lone Star state. The California retort to this Texan assault is well represented in a column by Joe Garofoli in the San Francisco Chronicle entitled, “Some context behind Rick Perry’s radio pitch for CA biz to come to Texas.”

This column, and an older one it links to from 2011 when Texas Gov. Rick Perry was running for president, promote a common meme: Texas’ success isn’t all it’s cracked up to be and what success it has is due to oil.

Let’s examine the claims made in the San Francisco Chronicle one at a time.

Claim: Many of the jobs created in Texas are low-wage positions and Texas tied with Mississippi for having the highest percentage of minimum-wage jobs in the nation, according to the US. Bureau of Labor Statistics.

Context: The minimum wage varies from state to state as does the cost of living. California has the third-highest cost of living in the nation at 132 percent of the national average, behind Hawaii and New York. Texas has the second-lowest cost of living at 90 percent of the U.S. average. Some two-thirds of California’s sky-high cost of living is due to the high cost for shelter, itself largely due to very restrictive land-use policies. Factoring in the cost of living, California’s $8 minimum wage can buy $6.06 of goods and services while Texas $7.25 minimum wage can buy the equivalent of $8.04.

This leads right into the next claim.

Claim: 17.3 percent of Texans lived in poverty in 2009, according to the U.S. Census while only 15.3 percent of Californians lived in poverty that year.

Context: The U.S. Census has always calculated the poverty level at the same income threshold, about three times the cost of needed food, the same across the nation, regardless of cost of living. After 20 years of pressure from Congress to take cost of living and the value of government benefits into account, the U.S. Census released its Supplemental Poverty Measure the week after the election. With this new, more comprehensive measure, California had the nation’s highest poverty rate from 2009 to 2011, 23.5 percent. Texas’ true poverty rate dropped from 17.3 to 16.5 percent. This means that, as a proportion of the population, there are 42 percent more poor people in California than in Texas.

As with poverty, the cost of living has a big impact on the next common claim about Texas.

Claim: The income gap between wealthy and middle-class families is the fifth-widest in the nation in Texas.

Context: According to a November 2012 government workers union (AFSCME) report, liberally governed California has the third-highest income inequality gap in the nation; Texas ranked seventh, better than fifth-place New York and sixth-place Louisiana and a tad-greater income disparity than eighth-place Massachusetts. But this data from AFSCME uses the old U.S. Census measures of poverty. Had the report’s methodology taken into account Texas’ low cost of living, it is doubtful that Texas would have placed in the Top 10 and California, ranked third in this report, likely would have ranked first in the nation.

Claim: 26 percent of Texans don’t have health insurance — the highest rate in the nation.

Context: This claim is driven by the percentage of the population that is covered by Medicaid (Medi-Cal in California). Looking at those under 65 years old, 78.1 percent of the population in California is covered versus 73.8 percent in Texas.

Claim: Texas is dead last in the number of residents over 25 who have a high school diploma with an insinuated link to Gov. Perry’s reductions in education funding in 2011.

Context: This oft-repeated meme is directly tied to foreign immigration as well as manufacturing jobs. Some 79.9 percent of Texans may have a high school degree, but California has the third-lowest percentage of people with high school degrees, 80.6 percent, barely ahead of No. 2 Mississippi at 80.4 percent (and, given the margin of error, Mississippi may be ahead of California). But, the strength of non-oil related manufacturing is greater in Texas (10.7 percent of the economy) than in California (9.6 percent), meaning that there are greater opportunities for those with less educational attainment.

Further, rather than look at adults with degrees, how are the schools in Texas and California performing? The U.S. Department of Education issued a report in January 2013 looking at high school graduation rates. Texas graduated a higher percentage of its students (78.9 percent) than did California (78.2 percent). Further, among Hispanic students, who are the plurality in both states, the disparity is even higher, with 77.4 percent of Texas Hispanics graduating high school versus 71.7 percent in California.

Insofar as school funding goes, the National Education Association lists its evaluation of K-12 per student average daily attendance funding. In the most recent year, the association calculated the U.S. average per pupil ADA at $11,305, with California at $9,524 and Texas at $9,446. But these figures are not adjusted for the rather large cost of living differences from state to state. The fact is the dollar goes about 42 percent further in Texas than in California. With the cost of living figured in, Texas spends at 97 percent of the U.S. average while California weighs in at 67 percent of the U.S. average.

This may have something to do with the context for the next claim.

Claim: The SAT scores of Texas students rank 45th nationally.

Context: SAT scores are unsound measures of academic performance. First of all, not every student takes the SAT. The SATs are self-selecting. In some states, guidance counselors and tradition drive far higher — or lower — participation rates. Texas’ SAT participation rates have been climbing rapidly in recent years. Further, the SATs make no account for racial and ethnic variations in the test-taking student body.

A better measure of academic performance would be a national standardized test that virtually all students take. Fortunately, there is one, the National Assessment of Educational Progress (sometimes called the nation’s report card). Looking at the most recent NAEP testing data for fourth and eighth graders in math, reading and science as well as looking at race and ethnicity and considering the eight biggest states, there are 24 categories to measure (e.g., eighth-grade science results for African American students, etc.). The 2009 results showed Texas as having the strongest scores in 11 of 24 categories while California was last in 15 of 24 categories. Further, Texas showed no areas of weakness compared to the national average.

Claim: Experts say many of the jobs created in Texas had more to do with the state’s natural resources.

Context: About 9 percent of the Texas economy is tied to oil and gas and refining. It’s 3 percent in California. But, California has among the highest proven reserves in the nation — but political considerations keep most of that in the ground. (In 2009, I introduced a bill in the California legislation that would have opened up the first new offshore oil lease in California in 40 years. It passed the state Senate but died in the Assembly after pressure from environmental groups.) California does have abundant natural resources, but has chosen to increasingly restrict access to them. Further, as mentioned above, U.S. Bureau of Economic Analysis data shows that Texas’ manufacturing sector, even with oil refining removed, makes up a larger portion of the economy than in California. So, it’s not just the oil. Even so, California’s Monterey shale formation holds two-thirds of America’s estimated shale-oil reserves and could turn California into the nation’s top oil-producing state — if Sacramento allows it.

Claim: Perry has talked up all of the California businesses that have moved to Texas however a closer look shows that most of those moves are expansions. There’s a difference.

Context: Is there really a difference? A job is a job. A net of some 2 million more Americans moved out of California than moved into the state from 2000 to 2010, according to the U.S. Census, with Texas the foremost destination state. Certainly some of those millions of Californians who left did so because of employment opportunities. In 2011, an extensive piece appeared in the Wall Street Journal that looked at the job creation environment in California. It cited a many powerful points, among them:

California business leaders consistently say that they plan to stop their job creation in the state, with large percentages expecting to grow jobs elsewhere. Texas is the most frequently mentioned destination state.

The National Establishment Time Series database shows that from 1994 through 2008, California ranked 47th among the states in net jobs created through business relocation, losing 124,000 more jobs to other places than it gained from other places.

California generated only 285,000 more jobs from new businesses than it lost to business failures, placing 29th in the country with virtually none of those net jobs created between 2000 and 2008, meaning that California’s famous start-ups haven’t contributed to the employment picture there for a decade.

From 2007 to 2010, according to the California Manufacturers and Technology Association, 10,763 industrial facilities were built or expanded in America. Of those, only 176 were in California, the lowest rate of any state with a per-capita manufacturing facilities investment rate of less than one-fifth of the national average.

Why does this matter? Critics of the Lone Star state claim that the “Texas miracle” is a myth. They are compelled to make this claim. Texas and California are remarkably similar in size, diversity and natural resources. They differ in their governance.

California’s taxes at the state and local level as a percentage of personal income are some 34 percent greater than in Texas. Government is about 33 percent larger as a share of the economy in California than in Texas.

If California is supposed to represent all that is good about America’s liberal future, then why does it have the nation’s highest poverty rate?

The Texas model produces more prosperity for more people. Open-minded Californians should ask themselves why.